AOL Doubles Down On Content After Surviving Activist Challenge

Jeff Bercovici
,
Forbes Staff
I cover technology with an emphasis on social and digital media.

Tim Armstrong, basking. Image by AOL via CrunchBase

Tim Armstrong is a happy man today. The AOL CEO just got an important vote of confidence from investors, surviving a challenge from activist hedge fund Starboard Value at the company's annual shareholders' meeting. Starboard failed to secure any of the three board seats it had targeted, with all of AOL's current directors winning reelection.

"The shareholders voted and I believe what you're seeing is a very clear indication from our long-term shareholders they believe the value of the company is going to be larger in the future than it is today," Armstrong said in a post-meeting conference call with investors and press.

Starboard sought to make the case that Armstrong's strategy, in particular the focus on monetizing premium news content through the sale of display advertising, is an expensive failure.

Today's vote clears the way for him to charge ahead with that program, which, he said, has changed only in minor ways since AOL spun off from Time Warner two and a half years ago.

"Essentially, I think we started out with a strategy saying we wanted to be the first large digital content company of this century and of the information age, and that continues to be what we’re targeting," he said.

If anything, AOL has been pushing even deeper into the high end of the digital content spectrum. This week the company launched Huffington, a weekly magazine produced for the iPad.
While most of its stories are generated by Huffington Post writers, early plans to use the magazine as a vehicle for repurposed content from the site were shelved in favor of a more premium approach that showcases original, long-form journalism.

Similarly, Huffington was originally announced as a free app, but will in fact be a paid one, with a single issue costing 99 cents and a monthly subscription costing $1.99. It's expected to get heavy promotional support from Apple, much as News Corp.'s The Daily did when it launched last year.

In other AOL news, the company quietly shut down its AOL News channel yesterday. All AOL News URLs now redirect to huffingtonpost.com.

The change should provide a meaningful traffic bump to the Huffington Post: Prior to the merger last year, AOL News had a substantially larger audience than HuffPost, with 22 million monthly uniques versus 13.2 million, according to Nielsen.

But it comes with a cost. All the articles published by AOL News writers over the past few years have now disappeared from the web. That includes journalism from the likes of David Wood, the reporter whose work recently resulted in the Huffington Post's first Pulitzer Prize. Wood's archive of AOL News stories is among the casualties of the domain redirect, along with much more. At the Huffington magazine launch Wednesday night, Wood acknowledged the mass disappearance but said there is an effort underway to rescue the lost work and provide writers with access to it.